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Log Lane may offer property tax "rebate"

Log Lane has come up with a creative way to save money for people who own property there.

The Log Lane Village Board of Trustees has changed course on how it will decrease the amount people pay in town property taxes.

The plan had been to put it to a vote of the people and let them decide on a formal decrease to the town's mill levy. But discussions with the town clerk and town attorney - along with concerns about what would happen if the approximately $40,000 in monthly marijuana tax revenue the town clerk reported is now being taken in were to disappear - led them to rethink things.

The board voted unanimously Wednesday night in favor of using a temporary mill levy credit to accomplish the plan to lower the property taxes people pay in Log Lane.

This happened before Bert Brown had resigned as mayor, so he was among those voting on the issue.

The mill levy credit works similar to a rebate. Property owners would pay their normal taxes, but then would receive a rebate for whatever percentage amount the trustees decide on. For example, if an owner paid $1,000 in property taxes, and the board decided on a 20 percent mill levy credit, the owner would receive a check for $200 back at a later date.

Having a mill levy decrease as a ballot issue would have been a very unusual thing, since the board of trustees sets the mill levy each year and can lower it on their own without taking it to an election. However, due to the Tabor Act, if Log Lane wanted to up the mill levy after lowering it, they would have to have resident approval to do it - via an election ballot issue.

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Another option the board had was to put in a temporary credit on the current mill levy, Town Clerk Marty Dasovich explained.

"Either one of these options we don't have to put on the ballot," he said. "We can, though."

The same is true for other governing entities in Colorado that set mill levies, with them being able to set it at the same level or lower or else issue temporary credits. It is mill levy increases that automatically require votes of the people.

Cathy Geist of the Morgan County Assessor's Office confirmed that adding a temporary mill levy credit was something that Log Lane could do, adding that there are other taxing districts in the county that use this process.

But she said she had not yet heard anything from Log Lane about it as of Friday afternoon. That is something that likely would be settled sometime between November and December when the town sets next year's mill levy, Geist said.

The goal of the credit, Dasovich said, would be for the Log Lane property owners to not have as much money going to property taxes.

The effect of the credit would not benefit those who rent their homes unless their landlords chose to share, the clerk said. The same would have been the case if a ballot issue to decrease the mill levy were to be put on the election and pass.

When such a ballot issue was being proposed, the board had looked at a decrease of 20 percent. It was not specified Wednesday night if that would be the amount for the credit.

But by doing the property tax decrease as a credit, the highest mill levy amount the board can set in future years will remain the same as it is in 2017.

"It's problematic if you lower it to ever get it back up again," Dasovich said of lowering the mill levy.

One of the reasons the board cited for wanting to do it as a credit was the uncertainty about what would happen for the town if federal marijuana law were to be enforced fully and the town's pot-related businesses forced to close.

"What if for some reason something would happen and they all go away?" Trustee Michael Carlson asked.

By doing the property tax decrease as a credit, the town would have a safety net as such for that worst-case scenario, since the higher mill levy had been enacted by town voters specifically to provide the town more of a sustainable revenue source. When the board voted to allow licensing and regulation of marijuana businesses, being able to things like repave roads and lower property taxes were among the expressed goals.

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